Split Valuation means that you can define various prices for a Material in the master data (Accounting1 tab) dependent on a certain categorization - Valuation Type. When you have set the Valuation Category for a material to 'C', you may create additional views in Accounting for the material, with a different price for each Valuation Type, e.g.
C1 - new part - €1000 (new purchased value)
C2 - damaged part - €10 (scrap value)
C3 - refurbished part - €700 (value based on the cost of refurbishment)
Then with the Refurbishment Order you can take a C2 material & "convert" it to C3, adjusting the price & stock value for your refurbished parts.
Learn more about the Split Valuation concept at SAP Help & SCN:
Split Valuation - MM - Material Price Change (MM-IV-MP) - SAP Library
Split Valuation: MM-FI Integration
As for the other question, you are probably seeing the cost of the material you are going to refurbish, from the Order header (what is your price control & price for this material in MM03?)